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The Transfer Process

Conveyancing and Transfers

The Transfer Process

While the transfer process follows a series of successive stages, the time period involved varies considerably.

Here are some guidelines:
• A cash transaction may take 6 – 8 weeks
• Within normal circumstances (including bond approval), approximately 3 months
• If conditional upon the sale of purchaser’s property (within 30 days), approximately 4 months

  • STAGE 1
The Agreement of Sale is concluded between the Purchaser and the Seller, having been brought  together by the Estate Agent.
  • STAGE 2
The Agreement of Sale is checked by the Estate Agent’s manager and handed over to the Conveyancing Department for processing. The Conveyancing Secretary will instruct the Transferring Attorneys and send a copy of the Agreement of Sale to you and to the buyer with a covering letter.
  • STAGE 3
The Transferring Attorneys will inform you when the Deposit Has Been Paid And When The Bond Has Been Granted (if applicable). The bond application is processed and tracked by our  in-house consultant at Mortgage SA, PGP’s elected bond originators.
  • STAGE 4
Once a mortgage bond has been granted, it is incumbent upon the seller to obtain and produce Beetle And Electrical Clearance Certificates.
  • STAGE 5
The Documents Required To Enable Transfer to be passed (power of attorney conferred  upon the Transferring Attorney and Transfer Duty Declaration) are drawn up by the Transferring  Attorney and signed by the purchaser and seller.
  • STAGE 6
A Rates Clearance Certificate (a document stating that all rates and taxes for the year have been paid) – or a levy if applied to a sectional title purchase - is obtained from the municipality – or body corporate - by the Transferring Attorney.
  • STAGE 7
Transfer Duty is paid to the Receiver of Revenue (together with proof of rates clearance), and a Transfer Duty Receipt is issued.
  • STAGE 8
The Transferring Attorney Lodges All Documentation together with the Transfer Duty  Receipt at the deeds registry. Simultaneously, all bond documentation (if a bond is involved) will be lodged at the deeds registry by the bank or building society’s attorney (having been duly signed by the purchaser).
  • STAGE 9
All Bond And Transfer Documents Are Inspected By The Deeds Registry and, if  correctly prepared, come up for Registration. At this stage the purchaser must have the balance of the purchase price available, and the financial institution’s attorneys have the bond amount available. If the purchaser is not able to make the funds available, the seller’s Transferring Attorney will delay registration, which may be postponed for no more than 3 to 4 days before the deeds are rejected and will need to be re-lodged. The purchaser may then be put to terms and given 7 days written notice to rectify his default.

CONVEYANCING INFORMATION

AGREEMENT OF SALE 

The estate agent should assist you in completing the Agreement of Sale. The purchaser makes an offer to purchase the property in a document known as an Offer to Purchase. The offer is usually only open for acceptance until a specified date. If the seller accepts the offer by the said date then the Offer to Purchase becomes a binding contract between the seller and the purchaser. Should the seller sign the offer but alter it by adding or deleting clauses, this may constitute a rejection of the offer. The offer then becomes a Counter-Offer which will need to be accepted by the purchaser. 

COMPLETING AN AGREEMENT OF SALE 

The essential elements of the Agreement of Sale are: 

 

The buyer and the seller

The purchase price

The property

A written agreement signed by the parties or their representatives


The following are guidelines to completing an Agreement of Sale (non-compliance may cause unnecessary disputes between the parties): 
 

Write clearly and neatly in durable black ink

Delete all clauses not forming part of the agreement

Cross out all blank spaces

Ensure that all the parties initial at the bottom of every page and next to every deletion

Ensure that the agreement is witnessed. Witnesses should initial at the bottom of every page and next to every deletion


THE CONTENT OF AN AGREEMENT OF SALE 

What follows is a brief explanation of some of the clauses that are usually found in a pre-printed Agreement of Sale. 

Mortgage Bond
This clause is usually worded as a "suspensive condition". This means that if the clause is not fulfilled to the letter, then the agreement lapses or falls away. The clause usually states that if the purchaser fails to obtain a bank loan for a specified amount by a specified date, then the agreement lapses or falls away. It is very important to specify the amount of the loan required and the date by which the loan must be obtained. A purchaser should insist on the inclusion of this clause where he/she cannot afford to buy the property unless the said loan is obtained. 

Fixtures
The sale of immovable property includes all fixtures of a permanent nature. As a purchaser, if you are uncertain as to whether or not a particular item forms part of the property and you would like it to do so, then specify this in the Offer to Purchase. An item which often causes problems is an alarm system as it may belong to the security company and not the seller. In this case it is important for the purchaser to either agree to the removal of the alarm system or to take over the existing contract with the security company. 

"Voetstoots"
This clause means that the purchaser takes ownership of the property as is. It protects the seller from being sued by the purchaser for any claim arising out of patent or latent defects in the property. Patents defects are obvious defects which would be found upon a reasonable inspection of the property while latent defects are hidden defects. 

Electrical wiring certificate
It is a legal requirement that a property may not be transferred into the name of the purchaser unless a valid electrical wiring certificate exists that is less than two years old. This clause usually states that the seller must provide a valid electrical wiring certificate. If the purchaser requires a new electrical wiring certificate then this must be stated in the Offer to Purchase. 

Default clause
This clause becomes important if one of the parties does not comply with their obligations under the Agreement of Sale. In terms of this clause the innocent party may send a letter to the defaulting party demanding that he/she comply with the Agreement of Sale. Should the defaulting party not comply timeously, then the innocent party may choose to cancel the agreement and claim damages from the defaulting party. 

Sale of the Purchaser's Property
This clause is usually worded as a "suspensive condition". This means that if the clause is not fulfilled to the letter then the agreement lapses or falls away. The clause usually states that if the purchaser does not sell a specified property for a specified amount by a specified date the agreement lapses or falls away. It is very important to specify a due date by which the purchase price must be provided. A purchaser should insist on the inclusion of this clause when he/she cannot afford to buy the property unless his/her own property is sold. 

Offer by a third party or "RAT" clause
This clause allows the seller to continue marketing the property where the Agreement of Sale is subject to a suspensive condition. The object of this clause is to allow the seller to accept a better offer if the suspensive conditions set out in the Agreement of Sale have not been met. To exercise this right the seller must inform the purchaser of the better offer and require him/her to effectively delete the suspensive conditions by a specified date. Failing this the seller may accept the better offer. RAT clauses vary, but it is common for these clauses to define "better" offer. 

Section 29A of the Alienation of Land Act
Where the purchase price is R250 000 or less, the purchaser has a statutory right to cancel the Agreement of Sale within five days subject to certain exceptions. The Agreement of Sale must inform the purchaser of this right, as well as how to exercise this right. Failing this the purchaser may not be forced to continue with the agreement should he/she choose not to. 

Companies, Close Corporations and Trusts
Where the purchaser is a company, close corporation or trust it is advisable for the seller to insist that the person signing on behalf of such entity bind himself/herself as surety for the obligations of the entity. This will protect the seller if the purchaser fails to perform its obligations in terms of the Agreement of Sale. 

Although a duly authorised representative may sign an Offer to Purchase on behalf of a company or close corporation that is to be formed, it is not possible for a representative to sign on behalf of a trust to be formed. Where a representative does sign on behalf of a company or close corporation to be formed, it is advisable to limit the time period allowed for such formation. 

TRANSFER PROCESS 

The transfer process starts with the Agreement of Sale being sent to an attorney who is a qualified conveyancer. The conveyancer will then attend to the process of changing ownership of the property from the seller to the purchaser. 

On receipt of the Agreement of Sale a reliable conveyancer will perform numerous tasks to avoid unnecessary delays. The conveyancer will: 

 

Contact the parties and request the information and documentation required to draft the transfer documents

Read through the Agreement of Sale, taking note of important dates and clauses, and address any issues that may affect the validity of the agreement

Search the Deeds Office database to check for potential problems with the property or the parties

Request a Rates Clearance figure from the municipality or Levy Clearance requirements from the body corporate

Request the bank to provide the bond cancellation requirements and the title deed if the property is mortgaged.

On receipt of all of the abovementioned information and documentation, and provided all the suspensive conditions have been met, the conveyancer will draft the transfer documents.

The conveyancer will also request payment of the transfer costs from the party responsible for such costs (usually the purchaser).


On signature of the transfer documents and payment of the transfer costs the conveyancer will pay the outstanding rates or levies and transfer duty owed. 

The conveyancer will then wait for the rates clearance certificate or levy clearance certificate and transfer duty receipt. The conveyancer may also be waiting for guarantees from the bond attorneys to secure the purchase price. On receipt of the certificates, transfer duty receipt and guarantees, and provided there are no outstanding issues, the conveyancer will send the transfer documents to Cape Town for lodgement. 

There may be three sets of documents for lodgement under the control of three sets of attorneys – one attending to the transfer, another attending to bond registration, and yet another attending to bond cancellation. All these documents must be lodged and registered simultaneously. An error in any of these documents will delay registration of transfer. 

Upon lodgement the Deeds Office checks the documents for errors and for any reason why the transfer may not proceed. This process usually takes 10 working days but may take longer. Once the Deeds Office is satisfied that the transfer may proceed, the transfer "comes on prep" also known as "coming up for registration". At this stage, all the conveyancers check again that registration may proceed. If there are no problems, they will hand in their documents the next day and effect registration of transfer. The seller will normally be paid the following day. 

The process usually takes approximately 8 weeks but there are numerous factors that may delay this process. 

The most common of these are: 

 

Delay in receiving the bond cancellation figures or the title deed

Delay in receiving the transfer duty receipt

Delay in receiving the rates clearance certificate or levy clearance certificate

Delay in the purchaser paying the purchase price or providing guarantees for same

Delay in the fulfilment of any suspensive conditions

The parties agreeing to delay registration of transfer

Either party not signing the transfer documentation when requested to

The purchaser not paying the transfer costs when requested to

A lost title deed

Delays in the Deeds Office

Reference:  (This information was obtained from the DTS Attorneys Website)

Conveyancing Notes and Explanation

CONVEYANCING: CONVENTIONAL DEEDS (ACT 47/1937) GUIDELINE OF FEES CPI Reference: January 2017

Conveyancing fees are negotiable. These are merely guidelines and not minimum or maximum fees.

 

1. GENERAL NOTES:

The fees recommended in this guideline are in respect of and include inter alia the general conveyancing duties performed by a conveyancer for procuring the due and proper execution and registration of the relevant deed or document, or the filing thereof or cancellation thereof, as the case may be, as well as the responsibility placed on him for the accuracy of the facts mentioned in deeds or documents or which are relevant in connection with the registration or filing thereof as contemplated in section 15A of the Deeds Registries Act, Act 47 of 1937 (“the Act”), as amended; for ensuring that copies of any deeds and documents are identical as at the date of lodgement, that all applicable conditions of title are correctly brought forward in any deed of transfer or certificate of title, that any person signing a document as principal or representative has been appointed and is acting in accordance within the powers granted to him and that any security required has been furnished to the Master, that parties to deeds are correctly reflected, that the necessary authority has been obtained for the signing of any document in a representative capacity, that the transaction in question is authorised by and in accordance with the constitution, regulations or founding statement or trust instrument of a trust, as the case may be, of any church, association, close corporation, society, trust or other body of persons, or any institution (whether created by statute or otherwise) being a party to such document, where applicable, that the relevant particulars in the deed have been correctly brought forward from the power of attorney, as contemplated in Regulation 44A of the Deeds Regulations; and for this purpose shall include the taking and giving of instructions, all correspondence, including the perusal of completed deeds of sale; the preparation and attendance on signature of all powers of attorney, declarations, affidavits, resolutions, status affidavits, company certificates, exchange control certificates, certificates in terms of section 20 of the Alienation of Land Act 68/1981 and other necessary preliminary and ancillary documents as well as attendances in connection with the obtaining, preparation and signature of documents to ensure compliance with the provisions of the Financial Intelligence Centre Act and the signature of ancillary documents required by a mortgagee in terms of the National Credit Act; the payment of transfer duty or VAT and of all rates levied by any lawful authority, the obtaining and making of all clearance and other certificates; including attendances or consultation with an outside agent to obtain clearance certificates; the perusal of memoranda and articles of association and trust deeds, the making of all necessary financial arrangements, including the issuing of guarantees on behalf of bondholders or the provision and checking 2 of guarantees and attending payment in terms thereof; the drawing and preparation of any document, including all copies thereof, required for execution or registration at a deeds registry and the obtaining of registration thereof, arranging simultaneous lodgement and registration with another conveyancer or other conveyancers, where necessary; the giving of all references required by the deeds registry for examination purposes; and all attendances at the deeds registry, but shall not include:

 

Any attendance in connection with the drawing and execution of deeds of sale, deeds of donation, deeds of exchange, preliminary partition agreements, deeds of suretyship and acknowledgements of debt and documents of a similar nature;

Any separate act of registration of any other document which may be necessary before or in connection with the first-mentioned act of registration;

Any attendance in connection with the resolution of a dispute between the transferor and the transferee arising from a deed of sale or any of the other documents referred to in 1.1 above or from whatsoever cause;

Any attendance arising from negotiations between the parties, resulting in a further agreement or addendum or amendment to an existing agreement;

Any consultation for the purpose of drafting a marriage contract;

Any attendance or consultation, in addition to taking instructions, relating to the opening of a township register in terms of Section 46 of the Act; or incisions or excisions;

Any attendance in connection with the preparation and obtaining of documents relating to collateral security required by a mortgagee;

Any attendance on the issue of additional letters of undertaking and guarantees (other than in favour of or for bond holders, the seller or transferring attorney or undertakings for cancellation/release of bond costs in favour of the bond cancellation attorney). Suggested fee R640 per undertaking / guarantee;

Any attendance on investments in trust in terms of Section 78 (2A) of the Attorneys Act of 1979. Recommended fee R640 per investment, alternatively a fee based on the amount and duration of the investment;

 Any attendance or disbursement paid to a computer software supplier for purposes of receiving or drafting instructions electronically; 3

Any attendance or consultation with an outside agent to attend to municipal refunds and reconciliations on behalf of client. Suggested fee R425. The aforegoing fee excludes the fee payable to the outside agent;

Any formal certification to any linked attorney or third party of material facts relating to the transaction but beyond what is required for registration of the transaction itself and which certification a conveyancer may, but is not obliged to furnish (such as certification of the sale price, no conditions or servitudes that adversely affect the value of the property or the security of a mortgage bond, the disposal not forming a major part of seller’s assets, or compliance with specific sections of the Companies Act, Insolvency Act or any other Act) and that places the conveyancer at professional risk: A fee of R1070 per certification or a fee assessed according to the perceived risk and/or complexity thereof is recommended, payable by the requesting attorney or party.

NOTE: It is recommended that additional charges and disbursements discussed above in 1.1 to 1.12 be agreed upon in advance with the client. 

Have Your Legal Documents Ready

 

Buying or selling are involved processes, and as such will require you to have a ton of paperwork at the ready. In order to help this process go a bit smoother, put together at a minimum the documentation listed below:

 

I am Employed

 

  • Proof of income / Latest payslip
  • Copy of ID
  • Copy of Marriage Certificate or ANC Contract
  • Copy of the Offer to Purchase
  • 3 Months Personal bank statements
  • For commission earners: Proof of last 3 months commission earnings
  • Statement of Personal assets and liabilities

 

I am Self-Employed

 

  • Proof of income / Accountant's letter confirming income of applicant
  • Copy of ID
  • Copy of Marriage Certificate or ANC Contract
  • Copy of Offer to Purchase
  • 6 Months Personal bank statements
  • 6 Months business account bank statement Last 3 years Financial Statements. Where Annual Financial Statements are older than 6 months, Management Accounts not older that 2 months signed by the applicant and accountant must be provided in addition to the Annual FinancialStatements
  • Copy of Registration Documents or Trust Deed
  • Statement of Personal Assets and Liabilities

DTS Attorneys, Port Elizabeth

Harcourts Port Alfred is proud to be associated with Rian du Toit and his team from DTS Attorneys in Port Elizabeth. Your ongoing question answering, support and outstanding service from your conveyancing department is much appreciated. 

 

Transfer Duty Costs

There is no Transfer Duty on property under R900 000

  • From 900 001 to R1 250 000, transfer duty is calculated at 3% of the value above R900 001. (You don't pay transfer duty on the first R900 000)
  • From R 1 250 001 to R 1 750 000, Transfer Duty is calculated at 6% on the value above R 1 250 000.00 PLUS a flat rate of R 10 500
  • From R 1 750 001 to R 2 250 000 , Transfer Duty is calculated at 8% on the value above R 1 750 000, PLUS a flat rate of R 40 500.
  • From R 2 250 001 to R10 000 000, Transfer Duty is calculated at 11% of the value above R 2 250 000 PLUS R 80 500.
  • From R 10 000 001 and above, Transfer Duty is calculated at 13% of the value exceeding R10 000 000 Plus R933 000.

No transfer duty is payable if the transaction is subject to VAT.

 

TRANSFER DUTY CALCULATOR

 

BOND COST CALCULATOR

 

BOND REPAYMENT CALCULATOR

Griesel and Associates

Thank you Jannes Griesel, your support in administering the fund raising account for Emilene Bruwer was testimony to your caring personality

 

 

Our Port Alfred Attorneys at the Re-Launch of Harcourts 2016

Thank you Noel Stotter for always being at the other end of a phone for Harcourts Port Alfred.

Barry and Karen Woollgar, Woollgar Attorneys, your support is always appreciated